U.S. Department of Justice

WASHINGTON – Adley H. Abdulwahab,
35, of Houston, was convicted by a federal jury today for his
role in a $100 million fraud scheme with more than 800 victims
across the United States and Canada.

The conviction was announced
today by U.S. Attorney for the Eastern District of Virginia Neil
H. MacBride and Assistant Attorney General Lanny A. Breuer of
the Criminal Division.

“Today’s quick verdict found Mr. Abdulwahab guilty of a $100 million
fraud and stealing the life savings of elderly retirees and hundreds
of others who have seen everything they worked years for disappear,”
said U.S. Attorney MacBride. “This case, involving victims in dozens
of states, clearly demonstrates that a national fraud case can have
real implications to everyday people. That is why we created the
Virginia Financial and Securities Fraud Task Force last year to go
after national cases that impact ordinary citizens on Main Street
as well as Wall Street.”

“Mr. Abdulwahab participated in a $100 million fraud scheme, cheating
more than 800 victims across the United States and Canada,” said
Assistant Attorney General Breuer. “While lying to investors about
his education and criminal history, he was off buying fancy cars
with their money. Today, a jury let him know that financial crime
has consequences, and that investment fraud will not be tolerated.”

On Sept. 7, 2010, a federal grand jury returned an 18-count indictment
against Abdulwahab and two other principals of A&O Resource Management
Ltd. and various related entities that acquired and marketed life
settlements to investors. Today, Abdulwahab was convicted on all
counts, including: one count
of conspiracy to commit mail fraud, five counts of mail fraud, one
count of conspiracy to commit money laundering, five counts of money
laundering and three counts of securities fraud. The Court
will set the sentencing at a later date. At sentencing, Abdulwahab faces
up to 20 years in prison on each count except the securities fraud
counts, on which he faces up to five years in prison.

Abdulwahab’s co-defendant, Christian
Allmendinger, 39, was convicted by a jury on March 23, 2011.
Allmendinger will be sentenced on Aug. 14, 2011. Evidence at
Abdulwahab’s trial established that during his involvement with
the company, A&O obtained approximately $100 million from
approximately 800 investors, many of whom were elderly.

According to court records and
evidence at trial, Abdulwahab was part owner of A&O and was
active in the day-to-day management of the companies, as well
as in the marketing of A&O life settlement investment products
to investors. He and others engaged in a scheme to defraud investors
by making misrepresentations about such things as A&O’s prior
success, its size and office locations, its number of employees,
the risks of its investment offerings, and its safekeeping and
use of investor funds. Abdulwahab also lied to investors about
having a college degree in Economics, as well as failing to disclose
to investors that he previously pleaded guilty to a felony forgery
of a commercial instrument in a state court in Texas. Evidence
at trial showed that Abdulwahab routinely used investor funds
for personal enrichment, including a lavish home, a Ferrari and
a BMW.

When state regulators began to
scrutinize A&O’s investment products, Abdulwahab and others
manufactured a sham sales transaction to “sell” A&O to a shell
corporate entity named Blue Dymond and later to another shell
corporate entity named Physician’s Trust. However, A&O and
Physician’s Trust was still secretly controlled by Abdulwahab
and his co-conspirators.

Five individuals have pleaded
guilty in connection with the A&O fraud scheme: David White,
the former President of A&O; Brent Oncale, former vice president
of A&O; Russell E. Mackert, an attorney for A&O; Eric
M. Kurz, a wholesaler of A&O investment products; and Tomme
Bromseth, an A&O sales agent in the Richmond area.

This investigation was conducted
by the U.S. Postal Inspection Service, Internal Revenue Service,
and FBI, with significant assistance from the Texas State Securities
Board and the Virginia Corporation Commission. These cases are
being prosecuted by Assistant U.S. Attorneys Michael S. Dry and
Jessica Aber Brumberg from the Eastern District of Virginia and
Trial Attorney Albert B. Stieglitz Jr., of the Criminal Division’s
Fraud Section.

The investigation has been coordinated by the Virginia Financial
and Securities Fraud Task Force, an unprecedented partnership between
criminal investigators and civil regulators to investigate and prosecute
complex financial fraud cases in the nation and in Virginia. The
task force is an investigative arm of the President’s Financial Fraud
Enforcement Task Force, an interagency national task force.

President Obama established the
Financial Fraud Enforcement Task Force to wage an aggressive,
coordinated and proactive effort to investigate and prosecute
financial crimes. The task force includes representatives from
a broad range of federal agencies, regulatory authorities, inspectors
general, and state and local law enforcement who, working together,
bring to bear a powerful array of criminal and civil enforcement
resources. The task force is working to improve efforts across
the federal executive branch, and with state and local partners,
to investigate and prosecute significant financial crimes, ensure
just and effective punishment for those who perpetrate financial
crimes, combat discrimination in the lending and financial markets,
and recover proceeds for victims of financial crimes.